Key Insights
- Trump assassination attempt reshapes US election outlook, with minimal immediate market impact but potential long-term implications for assets like Bitcoin.
- Earnings season kicks off with 40 blue-chip companies reporting, as investors watch for signs of broader market rally beyond tech giants.
- UK inflation expected to dip below 2%, while retail sales data and ECB meeting could provide insights into consumer health and monetary policy direction.
The coming week promises to be a rollercoaster for financial markets, with political tensions, earnings releases, and key economic data all vying for attention.
An assassination attempt on Donald Trump has injected fresh uncertainty into an already heated US presidential race, while investors brace for a slew of corporate earnings and crucial inflation figures.
Trump Shooting: A Game Changer for the Election?
The failed assassination attempt on Donald Trump at a Pennsylvania rally has sent shockwaves through the political landscape. With Trump’s chances of winning the November election now surging to 66% according to PredictIt, markets are grappling with the implications of a potential Trump presidency.
Surprisingly, the immediate market reaction was muted, with only minor moves in traditional safe-haven assets. However, Bitcoin’s jump above $60,000 suggests that some investors may be viewing cryptocurrencies as a hedge against political instability.
Can the Magnificent 7 Maintain Their Earnings Magic?
This week sees 40 blue-chip US companies reporting earnings, including heavyweights like Blackrock, Goldman Sachs, and Bank of America. All eyes will be on Netflix’s Thursday release, viewed as a bellwether for the tech sector.
Investors are keen to see if Netflix can sustain subscriber growth and monetize its ad-based subscription service. With the S&P 500 e-mini futures nearing all-time highs, strong earnings could provide the catalyst for a fresh rally.
UK Labour’s Growth Strategy: More Than Just Houses?
The upcoming King’s Speech on July 17th will outline the new Labour government’s ambitious plans to boost UK economic growth. While housebuilding targets have garnered attention, investors are looking for a more comprehensive strategy.
The FTSE 250, a domestically focused index, has recently outperformed the FTSE 100. Will this trend continue as more details of Labour’s economic vision emerge?
Is the Mid-Cap Moment Finally Here?
Recent weeks have seen a broader market rally beyond the Magnificent 7 tech giants. The Russell 2000 index of smaller companies has outpaced the S&P 500, fueled by rate cut expectations and promising earnings forecasts. If this week’s earnings reports deliver, could we see a sustained shift towards mid-cap outperformance?
UK Inflation: Below 2% at Last?
Wednesday’s UK inflation data is expected to show headline CPI dipping below the Bank of England’s 2% target for the first time in years. However, sticky core inflation and service prices may keep the central bank cautious.
The ‘Taylor Swift effect’ on service sector prices adds an intriguing wrinkle to the inflation picture. How will the pound react to potentially divergent headline and core inflation readings?
Retail Sales: A Consumer Health Check
Retail sales figures from both the UK and US will provide crucial insight into consumer sentiment. While expectations are for a decline in UK sales, recent economic strength suggests a potential upside surprise.
In the US, core retail sales are projected to rise, but increasing unemployment could dampen spending. These reports could have significant implications for mid-cap stocks and rate cut expectations.
ECB Meeting: Setting the Stage for September?
The European Central Bank’s Thursday meeting is unlikely to bring any immediate policy changes. However, investors will be parsing every word for hints about potential rate cuts later in the year.
With markets pricing in a high probability of a September cut, a dovish tone from the ECB could put pressure on the euro, despite its recent strength against the dollar.
